San Jose

What It’s Like to Be a Latino Entrepreneur in Silicon Valley

With the help of Manos Accelerator, Latino start-ups try to break into the tech world’s ‘white boys club.’

Alex Murillo (left), 32, and Alejandro Quintero, 40, at San Pedro Market in downtown San Jose, are two of the entrepreneurs selected to participate in the second Manos Accelerator program. 
Julian King
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Alexia Fernã¡Ndez Campbell
Nov. 24, 2014, 7:12 a.m.

SAN JOSE, Caif.—Alex Mur­illo leans for­ward in his seat, sip­ping cof­fee from a shot glass and wav­ing his hands as he talks. He points to the screen of his Mac­Book Pro, ex­plain­ing the geni­us be­hind Audive, the mo­bile ap­plic­a­tion he is de­vel­op­ing that al­lows users to re­cord cov­er songs and mix tracks with mu­sic en­thu­si­asts around the world.

“This is the secret sauce,” says Mur­illo, hit­ting a key on his com­puter that fills the air with the sound of a man singing in Itali­an. “You can bring in vo­cals from a guy in Italy or you can bring in the fla­menco gui­tar from Spain.”

Mur­illo has made this pitch about three times to po­ten­tial in­vestors in Sil­ic­on Val­ley since launch­ing his start-up this sum­mer. He came up with the idea and pol­ished his pitch with the help of Manos Ac­cel­er­at­or, a tech in­cub­at­or fo­cused on grow­ing Latino-owned start-ups in Amer­ica’s high-tech cap­it­al. He was one of six en­tre­pren­eurs chosen from a pool of 83 ap­plic­ants to take part in Manos’s second ac­cel­er­at­or pro­gram, which ended in Au­gust.

Mur­illo moved to San Jose from Mex­ico with his wife nearly three years ago to take his chances in Sil­ic­on Val­ley. He had tried to launch a real-es­tate list­ings ap­plic­a­tion back home, he said, but the busi­ness cul­ture there was too res­ist­ant to change. Now Mur­illo and his five-per­son team are look­ing for an an­gel in­vestor to give them enough money to get Audive star­ted. He is also study­ing to get his CPA li­cense, just in case the start-up plan doesn’t pan out.

“That’s the backup plan,” says Mur­illo, 32, who worked in cor­por­ate fin­ance for Siemens in Mex­ico. “It’s a dream for an en­tre­pren­eur to come here to Sil­ic­on Val­ley.”

The odds are against him. Less than 1 per­cent of ven­ture-backed start-ups have a Latino cofounder, ac­cord­ing to num­bers from ven­ture cap­it­al clear­ing­house CB In­sights. The lack of di­versity at these in­vest­ment firms and high-tech com­pany has earned Sil­ic­on Val­ley nick­names such as the “white boys club.”

“It’s very hard to tap in­to those circles,” says Ed­ward Avila, CEO and cofounder of Manos Ac­cel­er­at­or. “If you’re a Latino who didn’t go to Stan­ford Uni­versity or the Ivy League schools, it’s a chal­lenge. And Lati­nos don’t typ­ic­ally have wealthy friends and fam­ily to get them star­ted.”

Avila, 45, knows this firsthand. The San Jose nat­ive comes from a work­ing-class fam­ily: His Costa Ric­an moth­er worked the as­sembly line at a fruit can­nery, and his Mex­ic­an fath­er was a shoe cob­bler. Avila was the first in his fam­ily to go to col­lege and has since worked for two dec­ades in Sil­ic­on Val­ley as a hu­man-re­sources ex­ec­ut­ive for high-tech com­pan­ies such as West­ern Di­git­al and Phil­lips Semi­con­duct­ors.

Avila, who launched his own start-up in 2011, says he re­mem­bers feel­ing like the only Latino en­tre­pren­eur in the room at net­work­ing events. His start-up nev­er took off, and Avila de­cided to fo­cus on sup­port­ing oth­er Latino en­tre­pren­eurs.

“Many people thought I was crazy,” he says. “To me it was a gut feel­ing. With all the Lati­nos we have in the U.S., you can’t tell me there aren’t en­tre­pren­eurs do­ing cre­at­ive and in­nov­at­ive things.”

Avila star­ted Manos in 2013 with two cofounders: Sylvia Flores, a chem­ic­al en­gin­eer, and Dav­id Lopez, a com­puter tech­ni­cian (and Jen­nifer Lopez’s fath­er). The group chose the name “Manos,”—the Span­ish word for “hands”—to spread the mes­sage that Lati­nos can do more than manu­al labor.

Their mis­sion caught the at­ten­tion of Google, which has partnered with Manos by provid­ing ment­ors, re­sources, and some op­er­at­ing funds. Last fall, Manos brought its first group of en­tre­pren­eurs from sev­en start-ups to its shared of­fice space in down­town San Jose. Par­ti­cipants de­veloped busi­ness plans, mar­ket­ing strategies, and el­ev­at­or pitches. The 12-week pro­gram ended with a Demo Day at Ya­hoo’s headquar­ters in Sunnyvale.

“I would really like to see a Juan Fernan­dez up there with Steve Jobs and Mark Zuck­er­berg,” says Avila.

The lack of di­versity in Sil­ic­on Val­ley gained na­tion­al at­ten­tion this sum­mer when high-tech com­pan­ies such as Apple and Ya­hoo re­leased their work­force demo­graph­ics for the first time. Their hir­ing re­ports show that Lati­nos and Afric­an-Amer­ic­ans make up less than 5 per­cent of their em­ploy­ees. The com­pan­ies dis­closed the num­bers in re­sponse to mount­ing pres­sure from me­dia and civil-rights groups.

Ale­jandro Quin­tero worked for years as one of the few Latino en­gin­eers at Sil­ic­on Val­ley com­pan­ies such as Cisco and Lo­git­ech. In 2012, he de­cided to quit his job and work full time on get­ting his own com­pany off the ground. Last year, he and his part­ner launched Cues­tio­name, a so­cial plat­form that al­lows people to pose ques­tions to gov­ern­ment of­fi­cials and oth­er lead­ers. So­cial-me­dia users can then vote on ques­tions they would like answered, giv­ing gov­ern­ment agen­cies an idea of which ques­tions they should re­spond to first.

Quin­tero, 40, par­ti­cip­ated in the second ac­cel­er­at­or pro­gram at Manos, which ended in Au­gust. The Venezuelan nat­ive said Manos has helped him make con­nec­tions and get ex­pos­ure in the com­pet­it­ive Sil­ic­on Val­ley tech world.

“The way it works in the val­ley is, it’s all about build­ing trust,” says Quin­tero, a tele­com­mu­nic­a­tions en­gin­eer. “We have a big­ger lad­der to climb be­cause we are a minor­ity that hasn’t had a big im­pact here the way Asi­ans and In­di­ans have.”

The next step for Manos is de­vel­op­ing a net­work of an­gel in­vestors will­ing to take a chance on their en­tre­pren­eurs. Get­ting that ini­tial in­vest­ment of $50,000 to $100,000 is cru­cial for the start-ups to suc­ceed, Avila says.

This month, Manos held its first three-day boot camp for pro­spect­ive in­vestors as part of the Manos An­gel Net­work. The group of sev­en in­vestors learned the ba­sics of in­vest­ing in early-stage ven­tures and heard pitches from 11 en­tre­pren­eurs, in­clud­ing Quin­tero and Mur­illo. At the end of pro­gram, they all voted on which start-up would get their $50,000 in­vest­ment.

The win­ner was Sil­ic­on Val­ley-based Sur­vmet­rics, which al­lows busi­nesses to cre­ate cus­tom­er sur­veys de­signed for smart­phone users.

“We were very im­pressed,” says Ale­jandro Es­trada, a Visa ex­ec­ut­ive who is look­ing to be­come a full-time an­gel in­vestor. “It seemed like a good strategy for a mar­ket that already ex­ists.”

Two oth­er Manos start-ups are also ne­go­ti­at­ing con­tracts with an­gel in­vestors, Avila says.

Though Audive or Cues­tio­name didn’t at­tract sup­port from these in­vestors, Mur­illo and Quin­tero didn’t seem too up­set. Launch­ing a start-up in Amer­ica’s in­nov­a­tion cap­it­al is not sup­posed to be easy, Quin­tero says.

“The job is not glam­or­ous at all,” he says. “You have to go and pitch and pitch again, be­cause you nev­er know if an in­vestor will be call­ing you to­mor­row. You just have to keep go­ing.”

Na­tion­al Journ­al re­cently vis­ited Sil­ic­on Val­ley to see how im­mig­ra­tion and tech­no­logy have trans­formed the San Jose area. In the com­ing weeks, Next Amer­ica will pub­lish a series of stor­ies about the people who are find­ing their place in Amer­ica’s wealth­i­est re­gion.

Contributions by Janie Boschma
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